Both the straight-line method and the effective-interest method of amortization will always result in:

a. the same amount of interest expense being recognized each year.
b. more interest expense being recognized than if premium or discounts were not amortized.
c. the same amount of interest expense being recognized over the term of the bonds.
d. the same carrying value each year during the term of the bonds.

C. the same amount of interest expense being recognized over the term of the bonds

Explanation:

Under straight line method of writing off interest on bonds paid, a company apportions the whole discount on such bonds plus coupon payments over the life of such bonds.

Thus in this case, a fixed amount is written off or amortized every year. The amortized discount is added to the carrying value of such bonds.

In case of effective interest amortization, the amount of discount amortized each year differs, being excess of total interest over cash interest.

Usually, in effective interest rate method, the amortization amount keeps on increasing and is the highest in the last year.

The common aspect being, under both methods, same amount of interest expense in total gets recognized over the term of the bonds.

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